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IRVING, Texas--(BUSINESS WIRE)--
Global
Power Equipment Group Inc. (OTC: GLPW) (“Global Power” or the
“Company”) today reported its financial results for the fourth quarter
and year ended December 31, 2017.

During the fourth quarter of 2017, the Company made the decision to exit
and sell its Electrical Solutions segment. Additionally, in October
2017, the Company sold substantially all of its Mechanical Solutions
segment, as well as its manufacturing facility and remaining production
equipment in Mexico. Accordingly, these segments have been presented as
discontinued operations for all periods presented, and the Company’s
results are presented as a single segment comprised of the former
Services segment (or “Williams”) and corporate headquarter operations.

Fourth quarter 2017 revenue from continuing operations was $44.3 million
compared with $59.1 million in the prior-year period, a $14.8 million
decline. Gross profit from continuing operations for the 2017 fourth
quarter decreased $1.5 million to $8.0 million. Loss from continuing
operations for the 2017 quarter was $3.2 million, or $(0.18) per share,
compared with $3.5 million, or $(0.20) per share, for the corresponding
2016 period. Total net loss was $12.3 million, or $(0.69) per share,
compared with $7.0 million, or $(0.40) per share, for the prior-year
period.

For the full year 2017, revenue from continuing operations was $187.0
million compared with $231.0 million in 2016. Loss from continuing
operations was $30.0 million, or $(1.70) per share. Total net loss was
$56.5 million, or $(3.20) per share.

Tracy Pagliara, President and CEO of Global Power, noted, “The outcome
of 2017 was disappointing. Our operating performance was below
expectations and the process to evaluate strategic alternatives for our
Electrical Solutions (Koontz-Wagner) business has not progressed as
quickly as we planned. Additionally, our liquidity position, while
somewhat improved recently, continues to constrain our business and, to
further complicate matters, closing on a new revolving loan facility in
a timely manner has proven to be a challenge.

“Importantly, we are making good progress thus far in 2018. Several
contingencies have been positively resolved. We have a well-respected
team in our markets and our backlog for Williams is strengthening. We
also believe several growth initiatives being pursued to enhance
Williams’ performance appear promising. Given this momentum and other
relevant considerations, our Board has concluded it is an opportune time
to evaluate strategic alternatives for Global Power, with the goal of
advancing the best interests of our shareholders and providing improved
long-term opportunities for our customers and employees. We also
continue to work diligently to conclude the sale of Electrical Solutions
by the end of the second quarter.”

Recent Developments

Received resolution of the U.S. Securities and Exchange Commission
(the “SEC”) Division of Enforcement’s investigation. On March 8, 2018,
the SEC Enforcement Staff informed the Company that they had completed
their investigation into possible securities law violations by the
Company relating to its disclosures concerning certain financial
information, including its cost of sales and revenue recognition, as
well as related accounting issues. Based on the information available
to the SEC Enforcement Staff as of the date of their letter, they do
not intend to recommend an enforcement action by the SEC against the
Company.

Resolved disputes related to previously disclosed unapproved change
orders and recorded revenue of $2.8 million in the fourth quarter of
2017.

Discussions for an asset-based loan have resumed with various lending
groups following the resolution of several contingencies that
prevented the Company from closing on an asset-based loan earlier.

Negotiated a $3.0 million incremental loan commitment with the
Company’s primary lender, which can be drawn upon in minimum
increments of $1.0 million and provides the Company with access to
emergency funding in the event it is needed.

Reduced the size of the Company’s Board of Directors (the “Board”),
prior to the date of this press release, from twelve members to five
members to better align with the size of the organization and to
reduce costs.

Developed a plan to initiate corporate cost reductions designed to
integrate and streamline certain back office operations, including the
reduction in executive staff. Cost reductions will continue through
2018 and are expected to accelerate following the intended disposition
of Electrical Solutions.

Progress in 2017

Sold the Mechanical Solutions segment, including its related Mexico
facility and equipment, and used a portion of the total net proceeds
of $44.5 million to reduce debt by $35.9 million in October 2017,
including full repayment of a $10.0 million first-out term loan from
August 2017.

Formed a limited liability company, of which the Company is a 25%
member, with a prime construction contractor to supply craft labor and
supervision for the construction of the new nuclear power facilities
at Plant Vogtle Units 3 & 4. The completion of the units is planned
for 2021 and 2022. The Company also was awarded other work separate
from the limited liability company and is currently bidding on other
opportunities for direct scope of work.

Secured a $45.0 million senior secured term loan that was used to
repay in full all outstanding loans and obligations under the
Company’s previous credit agreement, which was in default.

Collected $6.4 million of outstanding receivables for pre-petition
services rendered to a customer that filed for bankruptcy protection.

Favorably resolved and released to revenue a $4.4 million contingent
liability that was originally recorded in 2015.

Awarded several new nuclear and fossil-power contracts, including new
long-term contracts with well-established customers of the Company.

Sold the stock of Hetsco, Inc. (“Hetsco”), a wholly owned subsidiary,
for net proceeds of $20.2 million.

Consolidated Results for the Three Months Ended
December 31, 2017(compared with the corresponding period
in 2016 unless noted otherwise)

Revenue from continuing operations declined $14.8 million, of which
$6.2 million was related to the divestiture of Hetsco in January of
2017. An $8.2 million increase in revenue associated with construction
activities at Vogtle 3 & 4 was offset by a $12.4 million reduction in
revenue related to the completion of several fixed-price nuclear
contracts.

Gross profit from continuing operations declined primarily as a result
of lower revenue, whereas gross margin expanded 190 basis points to
18.0% compared with the 2016 quarter due to an improved mix of
business and the recognition of $2.8 million of revenue with 100%
margin resulting from the resolution of disputed unapproved change
orders. The 2017 period also included $1.8 million of zero margin
revenue associated with estimated loss contracts.

Operating expenses were down $0.6 million due primarily to a decline
in restatement expenses as a result of the wind-down of restatement
activities in conjunction with the filing of the Annual Report on Form
10-K for the year ended December 31, 2015.

Interest expense increased $5.1 million due to the amortization of
debt issuance costs associated with the repayment of $35.9 million on
the term loan, including full repayment of the $10.0 million first-out
term loan, in October 2017.

At the end of the period, backlog was $137.7 million compared with
$138.6 million as of the end of 2016. An increase in demand on
existing contracts and new contract awards related to the construction
of Plant Vogtle Units 3 & 4 mostly offset the $18.3 million in 2016
backlog related to the timing of work for a scheduled nuclear facility
outage that occurs every 18 months. Backlog as of December 31, 2017
included $85.6 million related to the construction of Plant Vogtle
Units 3 & 4, which represented 62.2% of total backlog. Backlog is
expected to improve $12.4 million in the first quarter of 2018 to an
estimated $150.1 million.

Adjusted EBITDA was $0.3 million compared with $3.5 million. See “NOTE
1—Non-GAAP Financial Measures” to the attached tables for important
disclosures regarding Global Power's use of Adjusted EBITDA, as well a
reconciliation of net income to Adjusted EBITDA.

Consolidated Results for the Year Ended
December 31, 2017 (compared with the corresponding year ended
2016 unless noted otherwise)

Revenue from continuing operations was $187.0 million compared with
$231.0, a $44.0 million decline. Gross profit from continuing operations
decreased $13.3 million to $17.9 million. Operating loss from continuing
operations increased $4.1 million to $22.0 million as a $9.2 million
decline in operating expenses was insufficient to offset the $13.3
million reduction in gross profit. Interest expense increased $6.3
million due to the amortization of debt issuance costs associated with
the repayment of $35.9 million on the term loan, including full
repayment of the $10.0 million first-out term loan. Loss from continuing
operations was $30.0 million, or $(1.70) per share. Total net loss was
$56.5 million, or $(3.20) per share.

Adjusted EBITDA was $(11.7) million in 2017 compared with $(3.4) million
in the prior year.See “NOTE 1—Non-GAAP Financial Measures” to the
attached tables for important disclosures regarding Global Power's use
of Adjusted EBITDA, as well a reconciliation of net income to Adjusted
EBITDA.

Board Composition and Executive Management

Global Power also announced that its Board of Directors has been reduced
from twelve members to five members, consistent with the Board
composition plans to better align with the size of the organization and
to reduce costs. The Board now consists of four non-executive directors:
David A. B. Brown, Charles Macaluso, Robert B. Mills and Nelson Obus.
Charles Macaluso will continue as Chairman of the Board.

Voluntarily resigning their positions from the Board were Carl Bartoli,
director since January 2008; Linda A. Goodspeed, director since May
2016; David Keller, director since May 2015; Michael E. Rescoe, director
since July 2014; Michael E. Salvati, director since August 2011; and
Gary J. Taylor, director since October 2015.

The Board also announced that Craig E. Holmes voluntarily resigned from
his positions as Co-President and Co-CEO and director as part of the
Company’s plan to reduce costs and transition into an operating business
from a holding company structure.

Mr. Macaluso, Chairman of the Board, commented, “I offer my heartfelt
thanks to our outgoing directors for their diligence during trying times
and their commitment to sound governance and serving our shareholders.
Their combined wisdom and experience have been greatly valued by all.

“I also am very appreciative of Craig’s dedication and hard work during
his time at Global Power. His financial and operating experience and
knowledge combined with his strong leadership skills and strategic
thinking enabled Global Power to survive through extremely challenging
situations. We wish him all the best in his next endeavor.”

President and CEO, Tracy D. Pagliara, will continue to serve as a
director.

Liquidity Update

As of April 9, 2018, the Company had cash and equivalents on-hand of
$8.5 million, restricted cash of $10.4 million and had an outstanding
gross debt balance of approximately $25.9 million.

For the year ended December 31, 2017, the Company consumed $30.9 million
of cash in operations, including discontinued operations. The Company’s
liquidity has remained very constrained as a result of continued losses,
inconsistent cash flows from operations and the inability to borrow
additional amounts for short-term working capital needs or issue
additional standby letters of credit.

Management continues to assess and implement steps in its liquidity
plan, including the pursuit of a new line of credit and the evaluation
of strategic alternatives for the Company as a whole.

2018 Outlook

Mr. Pagliara concluded, “Given our current backlog, we expect our
business to grow in 2018 while margins return to normalized levels.
Importantly, we are excited to pursue the pipeline of increasingly
diverse opportunities in front of us, including our new growth
initiatives in the decommissioning market, our expansion into Canada and
the oil and gas industry and the opportunities presented by analog to
digital conversions in power generation. We also intend to bid on more
scope of work at Plant Vogtle Units 3 & 4 as the project advances. We
plan to make substantial reductions in our general and administrative
expenses as we transition into an operating business from a holding
company structure. In the meantime, as previously noted, we are
evaluating strategic alternatives for the Company.”

The Company expects to hold a meeting of shareholders upon conclusion of
its strategic alternatives review or not later than December 2018,
whichever comes first.

Webcast and Teleconference

The Company will host a conference call on Tuesday, April 17, 2018, at
10:00 a.m. Eastern time (9:00 a.m. Central). A webcast of the call and
an accompanying slide presentation will be available at www.globalpower.com.
To access the conference call by telephone, listeners should dial
201-493-6780.

An audio replay of the call will be available from 1:00 p.m. Eastern
time (12:00 p.m. Central) on the day of the teleconference until the end
of day on May 1, 2018. To listen to the audio replay, dial 412-317-6671
and enter conference ID number 13678437. Alternatively, you may access
the webcast replay at http://ir.globalpower.com/,
where a transcript will be posted once available.

About Global Power

Global Power is a general and specialty construction, maintenance and
modification and plant management support services company serving the
nuclear, hydro and fossil power generation, pulp and paper, refining and
petrochemical industries.

Forward-looking Statement DisclaimerThis press release
contains “forward-looking statements” within the meaning of the term set
forth in the Private Securities Litigation Reform Act of 1995. The
forward-looking statements include statements or expectations regarding
the timing or outcome of the Electrical Solutions strategic review
process, if any, the ability to close on a revolving credit facility,
the outcome of a strategic review process for Global Power, the
Company’s ability to comply with the terms of its debt instruments, the
impact of planned cost reductions, reorganization and restructuring
efforts, the Company’s ability to implement its liquidity plan, the
Company’s ability to engage with a strong financial partner for the
continuing services business, expectations for growth of the business in
2018 and ability to realize the inherent value in the Company’s
capabilities, ability to compete well in Global Power’s markets, and
other related matters. These statements reflect our current views of
future events and financial performance and are subject to a number of
risks and uncertainties, including our ability to comply with the terms
of our credit facility and enter into new lending facilities and access
letters of credit, ability to timely file our periodic reports with the
SEC, ability to implement our strategic initiatives, business plans, and
liquidity plans, and ability to maintain effective internal control over
financial reporting and disclosure controls and procedures. Our actual
results, performance or achievements may differ materially from those
expressed or implied in the forward-looking statements. Additional risks
and uncertainties that could cause or contribute to such material
differences include, but are not limited to, decreased demand for new
gas turbine power plants, reduced demand for, or increased regulation
of, nuclear power, loss of any of our major customers, whether pursuant
to the loss of pending or future bids for either new business or an
extension of existing business, termination of customer or vendor
relationships, cost increases and project cost overruns, unforeseen
schedule delays, poor performance by our subcontractors, cancellation of
projects, competition for the sale of our products and services,
including competitors being awarded business by our customers that we
previously provided, shortages in, or increases in prices for, energy
and materials such as steel that we use to manufacture our products,
damage to our reputation, warranty or product liability claims,
increased exposure to environmental or other liabilities, failure to
comply with various laws and regulations, failure to attract and retain
highly-qualified personnel, loss of customer relationships with critical
personnel, effective integration of acquisitions, volatility of our
stock price, deterioration or uncertainty of credit markets, changes in
the economic and social and political conditions in the United States,
including the banking environment or monetary policy, and any suspension
of our continued reporting obligations under the Securities Exchange Act
of 1934, as amended.

Other important factors that may cause actual results to differ
materially from those expressed in the forward-looking statements are
discussed in our filings with the SEC, including the section of the
Annual Report on Form 10-K for its 2017 fiscal year titled “Risk
Factors.” Any forward-looking statement speaks only as of the date of
this press release. Except as may be required by applicable law, we
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, and we caution you not to rely upon them unduly.

Financial Tables Follow.

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

Year Ended

December 31,

December 31,

($ in thousands, except share and per share amounts)

2017

2016

2017

2016

Revenue

$

44,329

$

59,105

$

186,982

$

231,007

Cost of revenue

36,362

49,617

169,056

199,775

Gross profit

7,967

9,488

17,926

31,232

Gross margin

18.0%

16.1%

9.6%

13.5%

Selling and marketing expenses

559

575

2,313

2,901

General and administrative expenses

8,196

8,886

35,984

43,424

Depreciation and amortization expense

525

378

1,673

2,871

Total operating expenses

9,280

9,839

39,970

49,196

Operating loss

(1,313)

(351)

(22,044)

(17,964)

Operating margin

(1.94)%

(0.59)%

(11.55)%

(7.78)%

Interest expense, net

7,043

1,910

14,626

8,318

(Gain) loss on sale of business and net assets held for sale

—

53

(239)

8,255

Loss on sale-leaseback, net

—

1,238

—

1,238

Other income, net

(36)

(354)

(45)

(343)

Total other (income) expenses, net

7,007

2,847

14,342

17,468

Loss from continuing operations before income tax expense (benefit)

(8,320)

(3,198)

(36,386)

(35,432)

Income tax expense (benefit)

(5,142)

289

(6,367)

1,407

Loss from continuing operations

(3,178)

(3,487)

(30,019)

(36,839)

Loss from discontinued operations before income tax expense (benefit)

(8,499)

(3,609)

(25,318)

(6,479)

Income tax expense (benefit)

653

(110)

1,186

295

Loss from discontinued operations

(9,152)

(3,499)

(26,504)

(6,774)

Net loss

$

(12,330)

$

(6,986)

$

(56,523)

$

(43,613)

Basic earnings (loss) per common share

Loss from continuing operations

$

(0.18)

$

(0.20)

$

(1.70)

$

(2.12)

Loss from discontinued operations

(0.51)

(0.20)

(1.50)

(0.38)

Basic loss per common share

$

(0.69)

$

(0.40)

$

(3.20)

$

(2.50)

Diluted earnings (loss) per common share

Loss from continuing operations

$

(0.18)

$

(0.20)

$

(1.70)

$

(2.12)

Loss from discontinued operations

(0.51)

(0.20)

(1.50)

(0.38)

Diluted loss per common share

$

(0.69)

$

(0.40)

$

(3.20)

$

(2.50)

Weighted average common shares outstanding (basic and diluted)

17,895,093

17,433,754

17,657,372

17,348,286

GLOBAL POWER EQUIPMENT GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

December 31,

($ in thousands, except share and per share amounts)

2017

2016

ASSETS

Current assets:

Cash and cash equivalents

$

4,594

$

2,805

Restricted cash

11,562

8,765

Accounts receivable, net of allowance of $1,568 and $1,008,
respectively

This press release contains financial measures not derived in accordance
with accounting principles generally accepted in the United States
(“GAAP”). A reconciliation to the most comparable GAAP measure is
provided below.

CONSOLIDATED ADJUSTED EBITDA

Three Months Ended

Year Ended

December 31,

December 31,

(in thousands)

2017

2016

2017

2016

Net loss-continuing operations

$

(3,178)

$

(3,487)

$

(30,019)

$

(36,839)

Add back:

—

Depreciation and amortization expense

525

378

1,673

2,871

Loss on sale of business and net assets held for sale

—

53

(239)

8,255

Loss on sale-leaseback, net

—

1,238

—

1,238

Interest expense, net

7,043

1,910

14,626

8,318

Restatement expenses

130

1,151

3,089

6,738

Stock-based compensation

861

594

2,716

1,665

Income tax expense (benefit)

(5,142)

289

(6,367)

1,407

Bank restructuring costs

—

1,320

350

1,320

Severance costs

9

(16)

1,505

732

Asset disposition costs

42

100

737

664

Franchise taxes

(29)

(12)

199

250

Adjusted EBITDA-continuing operations

261

3,518

(11,730)

(3,381)

Adjusted EBITDA-discontinued operations

(3,354)

(200)

(15,408)

4,083

Adjusted EBITDA

$

(3,093)

$

3,318

$

(27,138)

$

702

NOTE 1—Non-GAAP Financial MeasuresAdjusted EBITDA is not
calculated through the application of GAAP and is not the required form
of disclosure by the U.S. Securities and Exchange Commission. Adjusted
EBITDA is the sum of our net loss before interest expense, net and
income tax (benefit) expense and unusual gains or charges. It also
excludes non-cash charges such as depreciation and amortization. The
Company’s management believes adjusted EBITDA is an important measure of
operating performance because it allows management, investors and others
to evaluate and compare the performance of its core operations from
period to period by removing the impact of the capital structure
(interest), tangible and intangible asset base (depreciation and
amortization), taxes and unusual gains or charges (stock-based
compensation, restatement expenses, asset disposition costs, loss on
sale of business and net assets held for sale, bank restructuring costs,
loss on sale-leaseback and severance costs), which are not always
commensurate with the reporting period in which such items are included.
Global Power’s credit facility also contains ratios based on EBITDA.
Adjusted EBITDA should not be considered an alternative to net income or
as a better measure of liquidity than net cash flows from operating
activities, as determined by GAAP, and, therefore, should not be used in
isolation from, but in conjunction with, the GAAP measures. The use of
any non-GAAP measure may produce results that vary from the GAAP measure
and may not be comparable to a similarly defined non-GAAP measure used
by other companies.

For more than 60 years, Williams Industrial Services Group has been safely helping plant owners and operators enhance the value of their assets. Our mission is to provide superior construction and maintenance services in the industrial and energy markets as a trusted and proactive partner, consistent with our core values.